STATE OF NEW YORK, 
EXECUTIVE CHAMBER, 
ALBANY, March 18, 1875. 






To the Legislature : 


I have received a petition from forwarders, boatmen, and others 
‘ engaged i in transportation on the canals of this State, representing 
‘that the depressed state of their business calls for legislation, and 
" necessitates a reduction of tolls ; and requesting me to look into 
" the condition of the canal commerce, and to make such recom- 
_ mendations to the Legislature as will lead to measures of relief. 
_ Respectful consideration is due to so large and important a class 
of our business men. ‘They are proprietors of about six thousand 
boats, which are said to give employment directly to thirty thou- 
sand persons, and indirectly to twenty thousand others. They are 
in the peculiar relation of partners.of the State in a vast internal 
| “commerce ; owning and managing the equipment while the State 
i owns and manages the body of the canals. The State therefore not 
_ only has a common interest in the preservation of the joint busi- 
re ness, but has a distinct and special interest in the ability of its part- 
; # ners to continue to perform their functions, without which the joint 
8 business could not be transacted. It cannot afford to suffer the 
se equipment of the canals to be broken up; to allow a dispersion of 
ke _ the traffic which, if once lost, will not be easily regained ;. or to 
omit any measures of retrenchment in expenditure or acknowl of 
administration which will enable it and its partners to meet sucess- 
fully the increasing competition of the railways with each other 
- and with water transportation. 


1 












‘ 
2 

Impressed with the considerations which induce a liberal policy 
on the partiof the State towards its partners in the internal com- 
merce it has\scen fit to undertake, Iam, on the one hand, predis- 
posed to every practical and just measure for enfranchising trade 
and industry and cheapening the interchange of commodities, and, 
on the other, to listen to the rightful complaints of our people 
against the extreme burden of our present taxation and the pro- 
digal and wasteful expenditure in connection with the canals, which 
is one of the main causes of such taxation. 

I have, therefore, felt it my duty to devote the intervals of time 
I could command to -a personal investigation of the subject, in 
order to be able to recommend to you such specific measures as 
the exigency seems to require, in the direction indicated in the 
following passage of the message [ had the honor to communicate 
at the beginning of your session. 

“A careful investigation whether the net incomes of the canals 
retained cannot be increased, ought to precede a surrender of what 
little now exist. Ordinary repairs should be scrutinized with a 
view to retrenching their cost, and to obtaining the largest possi- 
ble results from the outlay. * * * All improvements should 
be governed by a plan and purpose, leading to definite results ; 


and, instead of scattering expenditures on imperfect constructions, 


should aim to complete and ‘make available the specific parts 
undertaken. Unity of administration and of system, both in 
respect to repairs and improvements, should be established.” 


PROBABLE INCOME OF THE CANALS. 


Exhibit A is a comparative monthly statement of the tolls on 


all the canals for the years 1873 and 1874. It shows that, during. 


the months of October and November and a few days of Decem- 
ber, which fall within the present fiscal year, in which period 


about one-quarter of the tolls of the year were collected, the 


decrease of tolls is from $836,123.27 to $638,132.96, or $197,- 
990.31. The decrease is about one-fourth of that portion of the 
tolls. A corresponding decrease for the months of May, June, 


ee 


9 
o 





July, August and September, 1875, as compared with the same 
months of 1874, would amount to $600,000. That would leave 
the tolls for the fiscal year of 1875 at $2,037,000. 

Assuming them to realize $2,250,000, we are next to find the 
probable effect of the reduction in rates which is now proposed. 
~ Exhibit Bis a statement of the effect of the reduction in the 
rates proposed computed on the tolls of the calendar year of 1874. 

If a similar computation be made on $2,250,000, instead of 
$2,637,070, the reduction of receipts to be produced by the 
lowering of the rates would be $534,832. The gross tolls accru- 
ing from all the canals for the fiscal year ending September 30, 
1875, would be $1,715,168. 

This diminution of tolls presents in a strong light not only the 
general depression of commerce, but particularly that of the special 
business of the boatmen and forwarders. 


TAXATION FOR CANAL PURPOSES, 
During five years from Oct. 1st, 1869, to Sept. 30th, 1874. 
The public mind is apt to be confused by the various methods 
in which the complex accounts of the State are kept. <A careful 
analysis and comparison of those accounts enables the following 
results to be stated in a simple form : 


The total amount of the tolls on all the canals 
during the five fiscal years ending Sept. 30, 




















eee en eS BORE ee $15,058,361 75 
The aggregate of ordinary expenses and ordinary 

repairs during the same period was_---_--_-- 9,202,434 23 

The apparent surplus was ..-.-...-- $0, Oda, tae. Oo 

The. aggregate of extraordinary repairs during | 

the same fivée-years was_-.----_---- 1 ad gta le $10,960,624 84 

egucy the apparent surplus ......5..--2'0bo1 Dd, SDI 2eI0e 


Real deficiency, being excess of repairs ordinary 
and extraordinary over the whole tolls ____-- fy) LO46H 9 7. a2 








‘s ah CS = aft 


Other payments were : 


INtCClESt: . 2a cee eter pero Oot ty amen 
Cost of premium on gold... -- 708,468 35 
Cost of premium on stock pur- 

Chasen © fe ess: eee |e 31,7386 00 
dratster 6xpenses, ic... 0. ~ oe 21,238 49 

——_———— 3,665,060 30 

Actual cost, exclusive of reduction of debt ----- $8,769,757 62 

Payment of debt : : 
Canal debts. ch. 5 ck ae eee cee oO aso OU aD 


General Fund debt, over the re- 
duction of moneys in sinking 
TONS hit cise ee ea hee. oe 2,002,182 28 
——_———._ 4,886,482 28 


Contribution to General Fund._-.~_-- - pe un eweas 200,000 00 


$13,856,239 90 — 





—_—— 
ae ne 





The taxes levied for these purposes during the 
Seine ‘period ‘werel ojo A ee $14,789,848 25 


—_ 
————_ —— 








All these payments are directly for canal purposes, except 
$2,552,132.28, which is in reduction of the General Fund debt, 
and $200,000 which was supplied to the General Fund. 

These two payments also, are indirectly of the same character. 
They but replace fresh advances made by the General Fund, to 
the canals. 


In the five years anterior to the period under consideration, from 


Oct. Ist, 1864, to Sept. 30th 1869, the taxes levied to meet defi- 
ciencies in the sinking fund, were $1,873,030.54 and the taxes 
levied for extraordinary repairs, awards, etc. were $6,322,632.52, 
making $8,195,6638.06. 

The Constitution (Art. VII, sec. 5) provides that, ‘‘ Every con- 
tribution or advance to the canals or their debt, from any source, 
other than their direct revenues, shall, with quarterly interest, 


% 


2 


at the rates then current, be repaid into the Treasury, for the 
use of the State, out of the canal revenues as soon as it can be 
done consistently with the just rights of the creditors holding the 
said canal debt.” 

In citing this mandate of the constitution, it is not intended to 
revive the illusion that even the most recent advances of the state 
for the use of the canals will ever be restored to the treasury. 
There is little probability that they can be regarded as invest- 
ments capable of producing a reliable income. So far as these 
enormous outlays have been usefully expended, the State will 
have to find its compensation, for the taxes it has imposed upon 
the people, in the indirect benefits of its efforts to cheapen the 
interchange of commodities. 

Exhibit C shows the expenditures for extraordinary repairs, 
etc., for each of the five years. 

Exhibit D shows the expenditures from taxation for the sinking 
funds during the same period. 

Exhibit E shows the specific application of the surplus of tolls 
over ordinary expenses and repairs. 


CHARACTER OF THE EXPENDITURE. 


Some items of the outlay attract attention. On the canals which 
the amendment of the Constitution authorizes the Legislature to 
abandon, there was expended for : 





Extension of the Chenango canal .-_------.---- $676,158 68 
merck iiver improvement. 2s 2. foc oe 15,400 00 
Tee ee. tt tan!) in Dee SL CYL. 100,000 00 
Meeroordilgry répairsso) 2Yo_ Sc 525 SS Lk 899,852 82 
Bee tee ea LS de se 969,875 57 

’ $2,661,287 07 





_—_—. 
ee 





If the inability of these canals to meet their ordinary expenses, 
or indeed to make any respectable contribution toward that pur- 


6 


pose shall compel their abandonment, this great expenditure will 

be a total waste of money, wrung from the people by taxation. 
On the Erie canal the following are two specimens : 

Work up to Feb. 1, 1875, on contract on section 1 


of Erie canal, contracted at $74,183.40  -.__ _- $458,114 72 
Work in Black Rock and Buffalo 

harbors; expended ofc _ ae - aime $717,333 00 
Engineering expenses estimated - - 71,733 00 
Additional appropriation unex- 

pended aftahebecuek el AR BRS jad 0x00 BOG 


——_—-—_—+-— $959 066 00 





$1,417,180 72 


Totaluwdbiwcdyd_ wih 2s die 

















This constitutes four millions of the eleven millions expended 
and the twelve millions appropriated for canal improvements 
within the last five years. 





In the meantime, the whole expenditure—at rates 
far too costly—on the Erie canal, for doubling 


locks. Was — 4dc2ss7 Joely |. ee eee eee ee $718,984 23 
For takino out the wall benchesiy = ears 1,013,870 25 








————————— 


$1,732,854 48 











It is impossible, in the limited time which the exigency allows, 
to thoroughly investigate the vast mass of various outlays which 
have cost the people eleven millions of dollars. But the 
necessity of determining at once the tolls and appropriations, 
a sense of how small a share of this burdensome taxation has 
attained any real utility, and how much of it has been wasted in 
unnecessary work, or int the extravagant execution of improve- 
ments in themselves useful, and a clear perception of the main 
sources of the evils of administration, and of reforms attainable 
by legislation without a change of the Constitution, make it my 


duty now to recommend specific and affirmative measures of 
redress. 
CAUSES. 

It is not merely in the general laxity and demoralization of 
official and political life, that we are to look for the causes of thees 
evils. The interest which fattens on abuses of public expenditure, 
is intelligent, energetic and persistent. Acting as a unit, it takes 
part through its members in the organization and the doings of 
both political parties; seeks to control. nominations ; rewards 
friends and punishes enemies ; and it begins to operate by every 

form of seductive and coercive influence upon public officers, 
as soon as they are elected. The vast mass of the tax-pay- 
ers are occupied in their daily industries, on their farms 
and in their work-sbhops, and cannot easily, and do not, in 
fact, make a business of politics. In a silent contest with the tax- 
consumers, they are often practically unrepresented. It is only 
when they are aroused and organized, and can find representa- 
tives whom they trnst that they protect themselves and over- 
whelm all resistance. Useless works in the specious garb of 
improvements are undertaken, because of the indifference of the 
public officers—the inertness of the tax-payers—the indefatiga- 
ble efforts of an influence seeking a benefit for its locality, which 
costs it an insignificant share of the burden imposed on the peo- 
ple; or the eager activity of the class who seek profit in contracts 
for construction, without reference to the utility of the work. 
Vertical walls are made to provide wharves for private individu- 
als, and bridges where no public interest requires them. — Ficti- 
tious improvements are contrived to supply profitable jobs. 
Work of real utility is made to cost greatly more than its actual 
value. 

In making these observations, I do not leave out of view those 
honest citizens who while employed upon the public works have 
sought and obtained only a fair and just return for their labor, 
skill and capital. But in framing laws we must guard against the 
influence of self-interest upon the minds of honest men. 


” 


8 
APPROPRIATIONS FOR ORDINARY EXPENSES AND REPAIRS. 


I renew the recommendation in respect to the canals which 
the recent amendments of the Constitution empowered the legis- 
lature to ‘sell, lease, or otherwise dispose of,” that while the 
manner of their disposition remains undetermined, ‘‘ no expendi- 
tures should be made on those works not strictly necessary in 
view of their probable future.” In order to carry out this policy, 
the appropriations for ordinary expenses and repairs upon them 
should be specified, separated from the provisions for the canals 
which the constitution requires to be retained; and should be 
reduced to the lowest practicable amount. 

In respect to ordinary expenses and repairs to the canals which 
are to be retained as the property of the state, I recur to the 
suggestion which I had the honor to submit in the annual message : 

“Ordinary repairs should be scrutinized with a view to re- 
trenching their costs, and to obtaining the largest possible results 
from the outlay.” 

In the present state of the prices of materials and the wages of 
labor, if the public officers can be inspired with a resolute purpose 
to make every expenditure for these objects effective, there ought 
to be no difficulty in reducing the appropriations from one quarter 
to one-third below the amount provided for last year. 

The present standard of repair and efficiency must be fully 
maintained. 


Everything of good administration, consists in the selection of 


the most necessary and useful objects of expenditure, and in secur- 
ing the greatest effectiveness in- the application of labor and the 
most advantageous purchase of materials. 

If a determination to accomplish this result, and a sense of 
accountability can be diffused throughout the agents employed in 
the public service, this object will be easily and certainly attained. 


APPROPRIATIONS FOR EXTRAORDINARY REPAIRS. 


The wisdom of abstaining from all new work, except that which 


4 


9 


“ 


is not only useful but absolutely necessary, is obvious. Every item 
should be scrutinized with jealous care. 

The aggregate ought to be kept within half a million ; and as 
much below that muximum as possible. A thorough retrench- 
ment in ordinary and extraordinary repairs, will enable the State 
to remit for the present year, as compared with the last, to the 
boatmen and transporters, from five to six hundred thousand dol- 
lars of tolls, and at the same time to give relief to our over bur- 
dened taxpayers, in a reduction of taxes, to the extent of more 
than a million and three quarters of dollars. 

If the restoring the Erie canal to its proper dimensions and the 
deepening of its water-way, which is by far the most useful 
improvement contemplated, can be deferred till next year, after 
its present condition shall be accurately ascertained, and then be 
proceeded with gradually, there is little else which cannot wait. 

Justice to the people and to the canals, demand that all extraor- 
dinary repairs, beyond what are clearly necessary to efficient naviga- 
tion, should be suspended until a thorough investigation shall show 
that every improvement proposed is really necessary ; and that the 
work is to be condusted under fair lettings and contracts, and is to 


be faithfully executed. 


ERIE CANAL. 
~ At the opening of navigation the present season, the double 
locks will be completed. The capacity of the Erie canal to do an 
aggregate business will be several times the requirements of the 
largest tonnage it has ever had. 
The removal of the wall-benches will be so nearly completed, 


that the advantages of that change will be practically secured. 


On September 30th, 1874, there remained of wall-benches 
24 48-100 miles on the towing-path side, of which 12 25-100 
miles are contracted to be removed; and 46 91-100 on the berme 
side, of which 7 50-100 are contracted to “be removed ; leaving 
12 23-100 miles on the towing-path side, and 39 41-100 miles on 
the berme side, where the obstruction is much less.important ; or 

2 


10 


? 


equivalent in all to 26 miles on both sides. That is less than seven 
per cent. of the whole length of the canal. 

The Engineer’s estimate of the cost of removing the remaining 
wall-benches was, in January, 1874, $711,140; and an appro- 
priation of $360,000 was made by the Legislature of 1874, which 
will be available for expenditure during the present year. 

As the only effect of the wall-benches now remaining is that 
they contract the canal at its bottom from 56 feet to 42 feet, and, 
in that proportion, the lower part of the prism, forming a section 
four feet above the bottom of the water-way 





thus lessening the 
body of water in which the boat moves for a fourteenth part of 
the length of the channel, and but one-fifth of that on the towing. 
path side—the inconvenience of their existence, to this limited 
extent, is not very great or emergent. 

In my judgment, a far more important improvement of 
the Erie canal would be effected by a thorough system of 
ordinary repairs, which should give the water-way its proper 
and lawful dimensions ; and by progressively deepening it, 
wherever reasonably practicable, from seven to eight feet. As 
the object would be merely to enable the submerged section 
of the boat to move in a larger area of water, so that the 
displaced fluid could pass the boat in a larger space, it 
would not be necessary to alter the culverts or other structures, 
or to carry the walls of the canal below the present bottom ; and 
the benefit would be realized in each portion of the canal improved, 
without reference to any other part of the channel which should 
remain unchanged. In facilitating the movement of the boat, and 
quickening its speed, it would increase the amount of service 
rendered in a given time, and would thereby diminish every element 
of the cost of transportation. It would benefit the boatmen and 
carriers more, even, than one cent a bushel remission of tolls. It 
would be of more real utility to navigation than five or ten 
times its cost expended in the average manner of so-called improy- 
ments on the public works. But it is too simple, too practically 
useful, to enlist the imagination of projectors who seek the fame 


1Na 


of magnificent constructions and of engineers who build monuments 
for exhibition to their rivals, or to awaken the rapacity of cormo- 
rants who fatten on jobs. 

I renew the recommendation of my annual message upon this 
subject; and particularly “that provisions be made by law to 
enable the State Engineer, soon after navigation is opened, to 
measure the depth of water in the canal by cross-sections as often 
as every four rods of its length, and on the upper and lower mitre- 
sill of each lock.” 


CANAL LETTINGS. 


The Constitution of the State provides that ‘“ All contracts for 
work or materials on any canal shall be made with the person who 
shall offer to do or provide the same at the lowest price, with ade- 
quate security for their performance.” ‘This requirement was in- 


tended to protect the State from extravagant contracts; but by 


artful bids, and in some cases, by fraudulent combinations, it is 
made an instrument to defeat the very end had in view by its 
authors. I have examined more than one hundred contracts, and 
I find that most are so contrived that not only does the State in 
the end pay from two to four times the amount of the contract, 
but that the work is not given to the lowest bidder in fact, 
although it may be in form. This result is brought about by the 


following contrivance. 


When a contract is to be let the Engineer makes out an estimate 
of the quantity and kinds of work to be done. Those who make 
bids state at what prices they will do each kind of work, or fur- 
nish each kind of material. These prices are footed up, and the 
bid which amounts to the smallest sum is accepted. The sums 
thus agreed upon average but little more than one-half the 
amounts estimated by the Engineer, and apparently the State 
makes advantageous contracts. On examination, it will be found 
that the prices for the several items bear no relation to their real 
value. In some instances excavation of earth is put at one cent 


. 


12 


per cubic yard, and in others eighty-five cents are asked. Exca- 
vation of rock blasted at one cent in some cases, and two dollars 
in others. Slope wall is bid for in some cases at 20 cents, and in 
others at $2. Hemlock timber which is worth at least $12 per 
thousand, is in some contracts put at less than $3 per thousand, 
and in others at $30 per thousand. Oak timber in one instance 
is put at $1 per thousand, and in others at $70. Some items are 
absurdly low, others unreasonably high. 

In some instances, a contractor will put in proposals on the 
same day for different jobs, but the prices for the same kind .of 


work or materials will vary in his several proposals several hun- 


dred per cent. 

It is clear upon the face of such proposals that some fraud is 
designed, but the Commissioners have been in the habit of accept- 
ing them. J am happy to say that Commissioner Thayer at a 
recent letting rejected this class of proposals, which are known as 
‘unbalanced bids.” Heretofore they have been accepted, and not 
only has the State paid unreasonable prices, but more than one-half 
of the work on large contracts has been done and paid for with- 
out being advertised or offered to the lowest bidders. 

The contractor gains these results by the following strategy : 

When the Engineer’s estimate of quantities and kinds of 
material are published by the Commissioners, the contractor will 
find out by collusion, or in some other way, what quantities of 


each kind of work or material will, in fact, be required, or he 


will see what influence he can exert to change the contract after 
it is made. If it is changed, no new letting is had, but he claims 
the job as his right. 

He then puts in his bid, offering to do such work or to fur- 
nish such material as he finds will not be required at all, or in 
small quantities, at absurdly low prices, at a quarter or in some 
instances at a twentieth part of its cost. The items which will 
be required in full, and probably in extra quantities, he will 
put at unreasonably high rates, and it turns out that what the 
contractor offers at low prices, is called for in small quanties, if at 


p 


13 


all, while those which are put at high prices are not only re- 
quired in full, but in most cases in extraordinary quantities. 

An example will more clearly illustrate how the State is de- 
frauded by these devices. 

The Engineer having estimated certain work and materials as 
follows : 





100 cubic yards of vertical wall at $8 ........-- $300 00 
3,855 ae sioperwall atel.o0... 2.222 5,782 50 
#400 feet B. M. white oak, at $50 ....-.+._._.-. 120 00 

60,000 és RC TOGCCMa Gp Lider ory, co abe Gee 900 00 
iisesniimare er wee AMEE) ee Gna cue $7,102 50 
A.’s bid for the job at these rates amounted to_--.--- 7,102 50 





B.’s bid for the same was, for 


100 cubic yards vertical wall, at $6._..-.-.---- $600 00 
38,895 is slope wall at.30 cents........,- 1,156 50 
mvs teet: b. MM. awhite oak, at $70_-. 2. a} 168 00 

60,000 is Neuen str GO wre Sok By 180 00 
es ere erage NP $2,104 50 


ss : 





The proposal of B., apparently so advantageous to the State, 
was accepted, and the contract awarded to him as the “lowest 
bidder.” But afterwards, by some influence, it was decided to 
make only vertical, and no slope wall, and to use only oak and no 
hemlock timber. There was no re-letting, although the agreement 
had been in fact revamped into a new and different contract, which 
enabled B. to collect from the State for , 

8,955 cubic yards of vertical wall, at $6--- $23,730 00 

62,400 feet B. M. white oak, at $70 .--.--- 4,368 00 








the sum of.__-- BE, kdl ba SNM Mim i age $28,098 00 





——- ——_—____., 





Tt will be seen that in such transactions—and they are numer- 
ous—in violation of the Constitution, the contractor gets the 


14. 


work without there having been in fact any public letting, or any 
chance for competition by others. 

For the purpose of showing actual results of this system, I 
state the following ten cases, which give the amount the State 


has paid on certain contracts in comparison with the sum for — 


which the contractor agreed to do the work at the lettings made 
by the Commissioners. 














Amount of contract upon Amountactually paid 
exhibited quantities at by the State up to 

contract prices. Feb. 1, 1875. 
Gontrach NO or Le $74,183 40 $458,114 72 
“ ep eee 29,431 00 56,845 68 
z Bret a } 37,871 00 110,320 13 
“ Aer a 10,617 00 49,936 30 
- Do aiken aes 14,397 00 78,967 20 
‘: GES eek 85,962 50 | 220,614 58 
i bose es os 31,286 00 130,317 45 
u Bega 86,584 00 222,610 68 
“ irae 9,504 00 41,127 55: 
te LO See he ies 45,300 00 191,973 Be 
$424,735 90 $1,560,769 84 


oe _————— 
SSS ee ———— 





These show that the State has already paid nearly four times the 
amount which was involved by the terms of the contracts, and 
though this excess amounts to more than a million of dollars, some 
of the expenditures are still going on with no prospect of comple- 
tion. It also appears that of the expenditures of $1,560,769.84, 
only $424,735.91, less than one third, was submitted to a public 
letting. | 

By maneeuvres of this character the costs of public works are 
run up to extravagant sums. Appropriations are absorbed, 


deficiencies are created to be paid by new appropriations, and the - 


people are loaded down by taxes. 
\ 


er 


15 


REMEDIAL MEASURES. 

Desiring to co-operate with you in a reform of existing abuses, 
and of the systems which have conduced to them, I submit to your 
consideration such suggestions for new legislation as seem to me 
adapted to meet the wishes and protect the interests of our com- 
mon constituents. ; 


ENGINEERS’ ESTIMATES. 


Methods ought to be devised to make the estimates of the kinds 
and quantities of work, exhibited on the quantity sheet for lettings 
of contracts, to conform to the actual work to be done. Ona 
change of the plan or specifications of a contract, the work under 
the old contract should be closed, and a new letting should take 
place. 


BIDDINGS. 


The law authorizes the Canal Board to make regulations as to 
the biddings, and one of those regulations provided for discarding 
bids which show bad faith upon their face. 

As the officers who let the contracts have not enforced this reg- 
ulation, except in a recent case, a law should be passed defining 
their rights and duties in this respect. 

I recommend that hereafter: the bids be opened, and the awards 
of contracts be made by the Canal Board. It is a larger body, 
and contains the officer who is charged with the fiscal administra- 
tion of the State, and also the State Engineer. It was formerly 
vested with these duties, and the change was only made to serve a 
temporary party object. 


OFFICIAL ACCOUNTABILITY. 


In the organization of governmental powers two conditions seem 
essential to the well working of the machinery of administration. 
First. While undue concentration of powers should be avoided, 
and checks and balances, in the requirement of the concurrent 
action of several persons, are preserved, a certain unity of function 


16 


and of organization is necessary to enable the people to enforce 
any real responsibility. 

An issue in regard to the conduct of public officers, or in regard 
to a policy of administration, should be submitted to the people 
with the simplicity of an issue to a jury at common law. The 
million of voters in the State cannot resolve themselves into a 
committee of investigation to hunt out by long and tedious search 
the particular wrong-doer. They cannot convert themselves into a 
court to go through a complicated and protracted trial. Amid 
the numerous and changing objects of interest which attract their 
attention they cannot devote themselves to a single specific measure 
of ordinary importance for three successive years. All schemes 
of administration which involve such impracticable demands for 
the co-operation of such vast numbers of individuals, discard the 
idea of representation in government. They compel the whole 
voting mass to conduct the complex affairs of human society 
in person. ‘They are shares invented to destroy the power of the 
people in their own government, to neutralize the elective principle, 
and to create official irresponsibility. 

The members of the Canal Board, other than the Canal Com- 
missioners and the Lieutenant-Governor, are all chosen at one 
election. The elective power of the people is effectual to make 
a change of persons or policy. But the Canal Commissioners are 
elected one each year, and it takes three years to make a com- 
plete change. They have practically ceased to act as a board. 
Each one carries on his administration over his division of the 
canals as if he were a totally independent authority. They make 
three separate reports. Hach one prepares a separate annual esti- 
mate for future expenditures. They formerly sat as members of 
a Board of Canal Commissioners, who consulted, decided and acted 
as one integral body. Their most important functions were per- 
formed as members of the Canal Board, or in concert with the 

Yanal Board, which embraced the great officers of the State, 
including its fiscal representative, who is under an ever active 
pressure to make both ends meet in the financial affairs of the 


State. They were practically subordinate to the fiscal members 
of the Administration. 

Second/y—lIt is fundamental that the spending officers must be 
subject to the influence and control of the officers whose duty is 
to provide the ways and means. No great corporate business, no 
private affairs could be conducted successfully on any other plan. 
The experience of the State, under a system in which the officers 
who initiate expenditure and control the application of the public 
money, and the execution of public work, have been independent 
and practically irresponsible, has been fruitful of irregularities, 
extravagance, waste and corruption. There have been several 
futile impeachments, but no real remedy. 

It does not seem expedient to wait for a change which involves 
an amendment of the Constitution, and will, therefore, take 
several years. There are measures within the competency of the 
Legislature which can be put into immediate operation, and which 
will have great efficiency to remedy the evils. 

Among these, the suggestion has occurred to me, that an In- 
spector of Public Works can be created by law, who shall 
be invested with full powers of. investigation, and shall report to 
the Governor and Legislature ; and who shall derive his appoint- 
ment from a source completely independent of the canal officers. 

Another expedient worthy of your consideration is to enforce 
the accountability of the officers, charged with the disbursement 
of the public money, by a lability to summary removal or sus- 
pension. 

The Constitution (Art. X, Sec. 7.) commands : 

‘Provision shall be made by law for the removal for miscon- 
duct or malversation in office of all officers (except judicial) whose 
powers and duties are not local or legislative and who shall be 
elected at general elections, and also for supplying vacancies 
created hy such removal.” 

At the close of the session of the convention of 1846, on the day 
before its final adjournment, it was discovered that, except in the 


9 


Oo 


18 


case of the Treasurer, no provision had been made for the removal] 
of State officers having charge of public funds, who had been made 
elective by the people of the whole State. The convention, not 
undertaking at so late a period to devise a system, devolved that 
duty on the Legislature. This power has remained twenty-nine 
years unexecuted. 

It is a duty of the Legislature which ought no longer to remain 
unperformed. Applied to the Canal Commissioners, who are 
agents not only in the application, but in the custody and dis- 
bursement of the public moneys, and to the State Engineer, who, 
with his subordinates, exercises great power over the expenditure 
by his estimate of the cost and certificates of the performance of 
work, it would be an improvement upon our administrative sys- 
tem, in accord with the intention of the Constitution, with sound 
principles of government, and with the indications of experience. 

Provision ought also to be made by law, for regulating the 
formation of the annual estimate for future expenditures. It 
ought not only to be the result of consultation between the Canal 
Commissioners, but should have the written approval of the State 
Engineer as to the necessity and cost of the work ; and of the 
Comptroller as to its propriety, considered in connection with the 
financial administration. ‘ 

It would doubtless be a valuable improvement to create a pay- 
master, appointed by the Commissioners of the Canal Fund, who 
should be accountable to the Auditor, and should make all pay- 
ments on the certificates of the Canal Commissioners and State 
Engineer. With these provisions the control of the State 
Engineer over his subordinates might properly be enlarged. 


OTHERS MATTERS TO BE LOOKED INTO. 


I have deemed it my duty to look beyond the abuses practised 
in the letting of contracts, and to see if the materials have been 
delivered, and the work has been done, for which so many millions 
have been paid out by the State, and also to learn if the locks, 


e 


ws 


19 


walls and other structures have been built in a faithful way, and 
in compliance with the contracts. I am satisfied from informa- 
tion I have already gained, that there should be an investigation of 
these subjects. It is my purpose, with the aid of the members of 
the Canal Board, to have an examination made of our public works, 
and to learn their condition. It may be too late to detect all 
frauds, but many may be exposed and punished, and a check put 
upon practices so destructive to morals, as well as to the public 
interests of the people of the State. 


CONCLUSION. 


It is clear that under the present system of canal management 
the people will not be relieved from taxation, the boatmen from 
high tolls, or the needed improvements of the Erie and Cham- 
plain canals be finished. It is in our power to gain these great 
objects by a wise and an honest policy of retrenchment, reform 
and official responsibility. Uniortunately the abuses now practised 
against our canals and their commerce are exciting strong preju- 
dices against these great public works rather than against the 
wrong-doers and the wrong-doing which tend to destroy them. 

Our duty is clear. Let us cut off the expenses which divert 
revenues from general improvement of the canals to local or indi- 
vidual purposes, make every official, every employee, every con- 
tractor feel that the laws you have just passed against fraud will 
be enforced, and our canals will be finished, their commerce revived, 
and taxtion will be lessened not only as it oppresses the boatmen, 
but also all other classes of our citizens. 

There is no real antagonism between the boatmen and _for- 
warders who seek a fair compensation for their services, the pub- 
lic who desire cheap transportation, and the people who justly 
claim some reiief from the present intolerable pressure of taxation. 
Their interests are joint. Whenever these classes are brought 
into a false position of apparent hostility, it is sure proof either of 
a bad state of laws, or of an unfaithful performance of official 


20) 


duties. Whoever for illicit gain despoils or wastes the 1 
applicable to these objects, is the common enemy of the 
and the taxpayers, who must unite to enforce measures 0 
and redress. — j.. {i 






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EXHIBIT A. 





MONTHS. 





| Yee prep 
Se sy ee eS 
ety a 
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Mees ee | ys 
Bemeetiner so) 8 
Bre OC Se ee 
Mereeninerrey oe 
BEI DET Se Jee oe 


A comparative monthly statement of the tolls for 1873 and 1874 : 

















1873. 1874. 
$258,028 29 $361,898 96 
439,888 24 | 492,393 57 
466,825 67 | 413,525 09 
455,799 88 | 308,769 10 
520,053 40 | 422,351 24 
529,914 91 | 392,460 83 
304,610 00 | 243,569 38 
2,298 36 2,102 75 
$2,976,718 57 $2,637,070 92 








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